2022 fueled CEOs’ focus on 2 top business priorities
As the year ends, I’ll attempt to summarize in 300 words the dozens of conversations I’ve had with CEOs over the past 12 months about the changing role of businesses in society. My takeaways:
—Despite political pushback and rising recession threats, “stakeholder capitalism”—particularly when it comes to the environment and DEI—is very much alive and well, especially at the largest companies, like those in the Fortune 500. The main reasons? 1) Talent remains a top challenge for CEOs, and forward-leaning policies on climate and diversity help them recruit and retain top talent. 2) Climate, in particular, has become embedded in their strategies, and is now seen not just as a “nice to have,” but as a necessary driver of future growth.
—The political pushback against “woke CEOs” has had an effect, but more on what CEOs say, less on what companies do. Most large companies have, over the past year or two, instituted new procedures to vet controversial social and political issues and decide if it is appropriate to speak out. More often than not, the answer is no. No one wants to be the next Disney, and no CEO relishes being pilloried by the governors of Florida and Texas or the editors of the Wall Street Journal.
—The SEC’s effort to require reporting on climate was a necessary step, but it became a counterproductive overreach, particularly with regard to the so-called Scope 3 emissions of a company’s suppliers and customers. It would have been better had the SEC conducted a civil conversation with business groups on how to implement the requirement—but today’s Democrats consider that de facto corruption.
—Even so, many companies continue to address Scope 3 emissions, with Walmart’s Project Gigaton, now covering more than 4,000 of its suppliers, a leading but not unique example.
In short, the trends and forces I document in my book Tomorrow’s Capitalist—which was sent to the printer before this year began—remain largely intact. Business is changing, with an enhanced focus on people and the planet. The changes may not go as far or as fast as some would like. And they may be going too fast and too far for others. But it is happening, and it will likely continue.
For my money, that’s reason to be optimistic about the New Year.
Ryan Salame, the co-CEO of FTX’s Bahamas wing, is reportedly the person who tipped off Bahamian regulators that founder Sam Bankman-Fried may have been funneling the exchange’s money to cover losses at his Alameda Research hedge fund. He informed the regulators days before Bahamian police got involved and FTX went bust. Bankman-Fried is still the only top FTX executive who has been charged over the scandal, so some have been theorizing that colleagues turned against him. Financial Times
The Senate yesterday unanimously passed a bill to ban TikTok from government devices. TikTok denies sharing U.S. user data with Chinese authorities, and insists the bill “does nothing to advance U.S. national security interests.” Republican Sen. Josh Hawley, who cosponsored says, “TikTok is a Trojan horse for the Chinese Communist Party. It’s a major security risk.” The House still needs to pass the bill—and President Biden still needs to sign it—before it takes effect. Wall Street Journal
Musk’s Tesla shares
Elon Musk sold around $3.6 billion worth of his Tesla shares earlier this week, after telling his followers at the end of April that he had “no further TSLA sales planned after today.” He has now sold around $23 billion worth of shares in the company this year, and told Twitter employees after he bought their firm in October that he sold Tesla shares to “save” Twitter. Tesla’s share price dropped 2.6% yesterday, and has now fallen 55% year to date. CNBC
AROUND THE WATERCOOLER
This edition of CEO Daily was edited by David Meyer.
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